Mr Bryce managed Reject Shop through a challenging period, ­including the global financial crisis, the downturn in discretionary spending and the 2011 Queensland floods, which forced the company to temporarily close its main distribution centre. ­

However, in the past 12 months, aggressive discounting in the ­department store sector, led by Kmart and Target, has taken its toll on Reject Shop and other discounters.

Last week, Woolworths hired a ­leading retailer from the UK to inject new life into Big W, taking the reins from Julie Coates. Former Coles ­executive Stuart Machin stepped in last year to turn around Target.

Reject Shop shares have fallen 40 per cent since February, when the group reported a 16 per cent fall in bottom line net profit to $16.9 million, weaker-than-expected sales from existing stores and higher-than-expected costs.

Over the last five years, Reject’s sales have risen 75 per cent, but net profit has risen only 18 per cent. Profits this year are expected to fall from $19.1 million to between $17 million and $18 million.

“The performance hasn’t been great over the last year or so, so I suppose (Mr Bryce) had to share some responsibility for that," said Hyperion Asset ­Management chief investment officer Mark Arnold.

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“There’s been a big increase in the number of stores but it hasn’t really been flowing through to strong profit growth," Mr Arnold said. “The margins have been coming down and ­same-store sales growth hasn’t been that strong."

The weaker dollar has pushed up Reject’s cost of goods and heavy discounting has squeezed gross margins.

Reject Shop has also been expanding rapidly, snapping up stores abandoned by rival Retail Adventures, the owner of Crazy Clarkes and Sam’s Warehouse, which collapsed in 2012.

Reject Shop opened 33 stores in the December half and planned to open 12 in the June half, taking the chain to 320 stores. Analysts are now ­questioning this rapid store roll-out in light of the poor first-half result.

Mr Bryce will stay with the company until the end of June to make sure planning is in place for 2015 and to ensure an orderly handover to his successor.

“I have been with the business since listing and am extremely proud to have been a part of what has been achieved over the past 11 years," Mr Bryce said.

“It is the right time for a change for me personally, with the chance to explore other opportunities," he said.

Chairman Bill Stevens said Mr Bryce would leave Reject Shop in a “very sound" financial position with infrastructure in place to support the significant growth opportunities ahead.

Reject Shop shares rose 36¢ to $10.65.

“We still think the outlook is positive for the business, it just needs better ­execution," Mr Arnold said.